Eugene Weekly : Coverstory : 11.25.2009

Seven years ago, Oregon Gov. John Kitzhaber rode off into the sunset with his trademark pressed jeans chafed from wrangling a bucking Republican Legislature in a recession.

Photo by Todd Cooper

Kitzhaber already had his cow lick back at south Eugene High School in 1964.

But now, the fly-fishing former emergency room doctor is back as the front runner in the race for Oregon governor. This time the Legislature majority is Democratic, like him, but the recession is deeper.

Kitzhaber’s cowlick and mustache are a little grayer. But he still looks good in jeans and a jacket with a green Earth lapel pin and a tie with kids dancing on stars. He’s 62 now, but a young, Internet-savvy campaign team is racking up friends on his Facebook page.

Asked if Oregonians want a reboot of the cowboy-booted former Governor, Kitzhaber is frank. “I guess that’s what the election is about.”

“I’m actually pretty proud of my record as governor,” Kitzhaber said. He points to six and a half years of a growing economy and a ground-breaking health plan that he said expanded coverage to 2 million people.

But Kitzhaber acknowledges that “people seem to remember the last 18 months” of his second term in office when the economy tanked and forced frustrating budget battles.

Republicans dubbed Kitzhaber “Dr. No”

for vetoing a modern record of 200 bills passed by the Republican-controlled legislature and calling the state “ungovern-able.”

Kitzhaber said the Legislature refused to either cut spending or reduce taxes to close deficits. They passed a bunch of unsustainable “funny money” and “gimmick” budgets, he said, “so I vetoed all those things.”

The Oregon Health Plan made Kitzhaber a national leader on health care reform and reportedly landed him on the short list of President Barack Obama’s candidates for secretary of health.

But the plan’s efforts to expand care by rationing benefits has suffered big budget cuts. Kitzhaber calls it an “enormous success” but acknowledges flaws. The plan succeeded in its intended goal of prioritizing what care to offer but failed in controlling costs, he said. “There were successes and there were failures in the Oregon Health Plan.”

Kitzhaber faults the national health care debate for focusing too much on insurance. “That’s not the same as health care reform,” he said.

A key issue that reform hasn’t addressed is that “10 percent of the population drives 70 percent of the cost,” he said.

He predicts that even if health care passes Congress, the nation “will be desperate” in looking for cost control after the 2012 presidential election.

Kitzhaber offers Oregon’s experience with groups of doctors managing care with per-person fees as a possible solution. “They are doing a pretty good job,” he said.

He also holds up the Oregon Health Plan as a possible way to control costs. With 25 percent of the market in Oregon, “it’s a pretty big dog,” he said.

Government waivers to allow more flexibility in how the state uses federal health care money could help, he said. Sen. Ron Wyden and Rep. Earl Blumenauer are “very well positioned to help us with that,” he said.

Major reform of the health care system could require an eight to 12 year transition, Kitzhaber said. In the interim some “quick short-term relief” is needed in the rapidly rising insurance costs for small businesses, he said. “The place that’s just hemorrhaging is the small group market.”

“I don’t think it’s going to happen from the top down,” said Kitzhaber of national health reform. Expecting Congress to pass a bill that will immediately solve the complex health care problem overnight “is naive, it’s ludicrous,” he said.

With large numbers of baby boomers nearing retirement, Medicare costs are set to go “right through the roof,” said Kitzhaber. “We really need to change the paradigm.”

Kitzhaber is critical of how the nation has prioritized its health care spending. “We have more than enough money for health care; it’s just what it’s being spent on.”

In a September article in The New York Times, Kitzhaber questioned the medical industrial system. He wondered why Medicare would pay hundreds of thousands of dollars to keep his dying mother in a hospital in 2005 but wouldn’t pay $18 an hour for a caregiver so she could die at home with loved ones in Eugene.

But in this election, the leading political topic may be jobs rather than health care. Kitzhaber blames Oregon’s status as one of the worst states for unemployment on the state’s dependence on durable manufactured goods. “Oregon’s economy is really built on the export of commodities,” he said.

As a solution he said the state needs to develop more jobs in “green energy and high tech.” He said many blue collar jobs could come from using federal money to retrofit housing for energy efficiency. He also said he’d like to see more forest thinning.

When it comes to “green jobs,” current Democratic Gov. Ted Kulongoski, who is not running again, has been widely derided for a runaway Business Energy Tax Credit (BETC) program that critics say has wasted a quarter billion dollars on corporate welfare while schools suffer budget cuts.

Kitzhaber defends the supposed “green jobs” program. “The Betsy [BETC] has been very, very important,” he said. “It would be a mistake to simply end it.”

But he said the state needs to “refocus” the tax break. The state should re-examine what its long term goals are with the program and examine the ratio of tax break per job, he said.

One key to the economy may be improving education, according to Kitzhaber. But with the state’s education problems, “there’s no quick fix,” he said.

He said he’d like to see more sustained early childhood investment in education and more emphasis on two-year college degrees. It used to be a high school dropout could get a job in a lumber mill, he said. But now, “those jobs have gone away.”

To get a good job now at least requires an associate degree, he said. The state should examine ways to “reduce the financial barriers” to those basic degrees, he said.

Republicans have accused Kitzhaber of calling for lower education budgets than the Legislature wanted while he was governor. Kitzhaber said that’s “very misleading.” He said the discrepancy was because he had to propose his balanced budget earlier, while the Legislature could wait until later when more revenues in the growing economy were available.

But Kitzhaber said “the metric of just spending more money on schools isn’t the right metric.”

“Class size is important, but there are two other metrics,” Kitzhaber said, pointing to parental involvement and teacher quality. “Just reducing the class size doesn’t necessarily help.”

Kitzhaber said he supports unions but said some states spend less money per capita on education than Oregon. The state faces a “very bleak” revenue future and “we all need to step back and not get defensive.”

On the environment, Kitzhaber has taken the bold position of calling for breaching four Snake River dams to help endangered salmon.

Kitzhaber said in weighing the economic costs against the benefits of dam removal, “it’s pretty much a no-brainer.”

Kitzhaber said he’s working on a position paper on other environmental issues and reducing global warming pollution, but he offered few specifics.

Local Congressman Peter DeFazio told TheOregonian this month that he faults Kitzhaber for a lack of specifics in his campaign. DeFazio has publicly mulled a run for governor for years, but few expect him to give up a key transportation funding chairmanship in Congress for the difficult job.

“I have great respect for Peter; he’d be a formidable opponent,” Kitzhaber said of the fellow Democrat.

Kitzhaber’s longtime friend Bill Bradbury, whom Kitzhaber once appointed to a secretary of state opening, has filed for the race but trails back in the polls. Bradbury appears to be running from the left, emphasizing global warming and calling for bigger increases in corporate taxes to fund major increases in school funding.

Both Bradbury and Kitzhaber back the $733 million tax increase on the wealthy and corporations on the ballot to save school funding in January.

Former Gov. Barbara Roberts is backing Bradbury, but Kitzhaber has been endorsed by Attorney General John Kroger, schools Superintendent Susan Castillo, Treasurer Ben Westlund and almost a third of the Democratic legislators.

So far the Republicans don’t appear to pose a great threat. They haven’t won a statewide race since 2002. In his 1998 reelection, Kitzhaber beat Republican Bill Sizemore by a 2-1 vote margin.

Part of Kitzhaber’s charm as a politician, and perhaps a handicap if a tough opponent materializes, is that he seems more reluctant than power hungry.

“I have a house, and I don’t need the job,” Kitzhaber said of his campaign. “I don’t have anything to prove to myself,” he said. “There’re worse things than losing.”

He said in deciding to run, he also determined that he won’t let it harm his relationship with his 12-year-old son from a marriage that ended in divorce in 2003. “One thing I will not compromise is my time to be with him.”

A leading knock against Kitzhaber is that he’s a fair-weather governor who, when the going gets tough with Republicans and deficits, gets frustrated.

But Kitzhaber said he knows he could be in for a tough ride again. With the federal stimulus ending, “the budget is going to get worse,” he predicted.

Kitzhaber said he expects Democrats to lose seats in the Legislature, but “we’ll probably maintain a majority.”